Officers' Cause,July - 2014

Vol. 34 No.7 BANGALORE Single Copy : RS. 4/- JULY - 2014

2NATION FIRST, ORGANISATION NEXT, INDIVIDUAL LAST

BANKING SCENARIO –PAST AND FUTURE

ank nationalization during the year 1969 and1980 was done out of the policy decision taken

by the then government, led by Smt. Indira Gandhi,a great visionary, to meet various social obligations.The post nationalization period saw India surgingahead through sustained economic growth. Thebanking industry played a major role in the growthof agriculture and education in the country. Therewas self sufficiency in food production, massiveindustrialization, creating more job opportunities.Nationalization also saw banking facilities taken toevery nook and corner of the country.

Contrary to their earlier policies, in the year 1991,government of India in their anxiety to denigrate thepublic sector banks, granted licenses to various newgeneration private sector banks. However, majorityof the banks to whom licenses given were collapsedand were liquidated one after another. Some of themwere taken over by other banks, thereby, the publiclost faith and trust in the banking system.

The proposal now for granting licenses to corporateand industrial houses is against the basic principlesof nationalization as envisaged by the earliersuccessive government. The intention to grantbanking licenses to corporates and industrial houseshad been in the mind of neo reformists in thegovernment for the past several years. Even the UPA

government, in the earlier budget, announcedgranting banking licenses to corporate houses wheneven the Reserve Bank of India had their ownapprehension against such proposals. Financiallicenses with Industrial activity implies that there couldbe connected lending that also will exacerbate theconcentration of economic power with politicalinfluence in few hands.

The International Monitory Fund (IMF) had alreadycautioned India against licensing corporate entities,to step into the business of connected banking. Theyhave also pointed out that the government needs tolook for ways to manage the ownership of the banksso that the public can meet the growing economy.

While our neo reformists advocate privatization ofbanking system and are campaigning for de-nationalization, in US the authorities are trying tobring banking under state control. In the case ofLehman Bros, the fourth largest bank in US, therewas severe pressure over the government and onother banks to bail out the bank which was objectedby the treasury secretary that government cannot bailout a sick bank out of tax payers’ money. The decisionwas a clear message to the trading community thatit is unethical to save institution that indulged inspeculation trade out of public fund. The capitalistphilosophy of ‘profit for the entrepreneurs and loss

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EditorialEditorialEditorialEditorialEditorial

Officers' Cause,July - 2014

SUCCESS AWAITS AT THE DOOR WHERE DILIGENCE IS

Officers' Cause, July - 2014 3

for the government’ has recoiled on the market. Themelt down had spread across the world and manybanks have collapsed even in European countries.The Indian financial system however with their strongfundamental and sound capital adequacy withstoodthe wave of the melt down. Now RBI, in spite of theirreservation earlier, had succumbed to the pressureand agreed to grant licenses to certain applicantsconditionally.

In yet another major attempt the UPA governmentappointed a committee under the chairmanship ofShri. P.J. Nayak to submit a report on the future ofthe banking industry. The objective being to handover the entire banking industry to the private sector.P.J. Nayak committee report is a precursor towardsthis direction who made sweeping recommendationson the change of ownership of public sector banks.Mr. P.J. Nayak was the former Chairman of the AxisBank. One of the reason attributed in their report isthe deteriorating performance of the PSB’s, mainlyon account of NPA’s. They have also recommendedthat the government should transfer their holdings inPSB; to a Bank Investing Company (BIC) and bringdown their holding to under 50 percent so that theyfall out of the purview of the government anticorruption machinery, RTI Act, and restriction onremuneration etc. In order to achieve this committeeeven recommended repealing of State Bank of India(SBI) Act, State Bank of India (subsidiary Bank) Act,and the two Banking Nationalization Act passedearlier. They have also recommended that the Banksbe brought under the purview of Indian CompaniesAct and be subjected to the listing requirements underSecurities and Exchange Board of India (SEBI). Anotherrisk of the recommendation is the lack ofaccountability in the banking sector once the

government’s vigilance system takes a back seat.Problem with the PSB’s and other PSU’s have beenthe influence of political executives who exerciseundue influence in the functioning of theseundertakings through their political agenda.

The global financial crisis commenced in the year2007 had its direct or indirect impact on the PSB’s.This crisis also had its affect on the performance ofcorporate houses and their commitment to the banks.In order to bail out the corporate and ensure industrialgrowth, government had adopted a Public PrivateParticipation (PPP) route for the implementation ofmany infrastructure projects such as nationalhighways , airports, housing, power projects, heavyindustries etc., Banks were compelled to fund for thislong term projects against their usual norms, as theirmain source of funds are coming through short termdeposits and capital. This has resulted in certainimbalance in their banking operation that led to crisis,when the loans were defaulted. When the loansbecome bad the funding was also stopped in viewof poor cash flow that has resulted in halting thevarious projects half way. Many of the NPA’s, thebank have are out of the default by the corporateagainst long term funding.

As such, there need for re-thinking on our bankingpolicy, instead of trying to adopt various reports onbanking operation by various committees. The latestbeing the Nayak Committee report. The Federationhad already expressed their reservation against thereport, including on outsourcing, which are muchagainst the interest of the bank. PSB have alreadywithstood the global financial meltdown with theirstrong fundamental. As such they need to be allowedto function with their strong fundamentals, free frompolitical influence and interference.

TEXT OF MEMORANDUM SUBMITTEDTO SHRI ARUN JAITLEY,

HON’BLE MINISTER OF FINANCE, GOVERNMENT OF INDIA

TTTTTeeeeext of the AIBOC Cirxt of the AIBOC Cirxt of the AIBOC Cirxt of the AIBOC Cirxt of the AIBOC Circular No. 2014/46, Datedcular No. 2014/46, Datedcular No. 2014/46, Datedcular No. 2014/46, Datedcular No. 2014/46, Dated27/06/201427/06/201427/06/201427/06/201427/06/2014

t was decided, as informed earlier, that the UFBUwill meet the Finance Minister in a delegation to

apprise him of our issues and demands.Accordingly, the delegation of UFBU met Shri Arun

Jaitley, Hon’ble Minister of Finance in New Delhiand submitted a Memorandum on wage revision.The Finance Minister assured that he would callfor the particulars and details from the FinanceMinistry and look into the matter.

Sd/-Sd/-Sd/-Sd/-Sd/-(Convenor)(Convenor)(Convenor)(Convenor)(Convenor)

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Organisational IssuesOrganisational IssuesOrganisational IssuesOrganisational IssuesOrganisational Issues

ARISE, AWAKE, STOP NOT TILL THE GOAL IS REACHED

4 Officers' Cause, July - 2014

RRRRRespected Sirespected Sirespected Sirespected Sirespected Sir,,,,,

We submit, for your kind perusal and information,the present position with regard to the negotiationsbetween the Indian Banks’ Association (IBA) andUnited Forum of Bank Unions (UFBU) on therevision of wages and service conditions of Bankemployees/officers.

United Forum of Bank Unions (UFBU) is theumbrella forum of 5 workmen unions and 4 officers’associations in the Banking Industry covering 1million workmen and officers and is currently onwage negotiations with Indian Banks’ Association(IBA). The wages and service conditions in theBanking Sector are governed by the Industry-levelBipartite Settlements signed between the IBA andthe Negotiating Unions/Associations of Bankemployees/ officers. The term of the last settlement(9th bipartite agreement) came to an end on31.10.2012 and the revision of wages and otherservice conditions has become due since01.11.2012.

UFBU has submitted its Charter of Demands toIBA on 30.10.2012 before expiry of the previousBipartite Settlement and requested IBA to adopt a

time-bound programme to hold the negotiations onthe demands and to expedite the settlement as earlyas possible. More than 10 rounds of discussionshave taken place between IBA and UFBU so far onthe issue but IBA is delaying the settlement. Despitea lapse of 20 months since starting of negotiations,no significant improvement is made towardsexpeditious conclusion of settlement. Moreover, IBAis offering the least increase quoting non-affordability of banks in paying higher wages partlybecause of increase in Non-Performing Assets(NPAs).

We furnish hereunder our view-points in supportof our just demands for a respectable wage revisionto all employees/officers in the banking industry:

a. PERFORMANCE OF PUBLIC SECTOR BANKS:a. PERFORMANCE OF PUBLIC SECTOR BANKS:a. PERFORMANCE OF PUBLIC SECTOR BANKS:a. PERFORMANCE OF PUBLIC SECTOR BANKS:a. PERFORMANCE OF PUBLIC SECTOR BANKS:

In Public Sector Banks, the profitability, Businessper employee and Profit per employee are on theincreasing trend only, which is also the basicyardstick for measuring the affordability of banksfor increase in wages. The data relating to publicsector banks as on March 2012 vis-à-vis the positionas on March 2007 is furnished below for your kindreference:

PERFORMANCE OF PUBLIC SECTOR BANKSPERFORMANCE OF PUBLIC SECTOR BANKSPERFORMANCE OF PUBLIC SECTOR BANKSPERFORMANCE OF PUBLIC SECTOR BANKSPERFORMANCE OF PUBLIC SECTOR BANKS

S.No.S.No.S.No.S.No.S.No. PPPPParticularsarticularsarticularsarticularsarticulars As on March 2007 As on March 2007 As on March 2007 As on March 2007 As on March 2007 As on March 2012 As on March 2012 As on March 2012 As on March 2012 As on March 2012

01 Number of Branches 49,573 67,930

02 Total Business `̀̀̀̀ 33 lac Crs. `̀̀̀̀ 85 lac Crs.

03 Operating Profit `̀̀̀̀ 42,655 Crs. `̀̀̀̀ 1,16,335 Crs.

04 Business per Employee `̀̀̀̀ 7.55 Crs. `̀̀̀̀ 15.01 Crs.

05 Profit per Employee `̀̀̀̀ 4.57 Crs. `̀̀̀̀ 8.42 Crs.

It is evident from the above statistical data that theperformance of Public Sector Banks is impressiveand continuously on the increase. Whereas thebank employees are not compensated with adequateremuneration in relation to the types of jobsperformed and the risks involved thereat.

Our demand for respectable revision of wagesconsidering the due share in the prosperity of the

banks on account of increasing profits is just andreasonable. The erosion in profits is mainly due toapportioning of huge amount of profits towardsprovisions and write-offs of bad loans, which cannotbe attributed as a reason for denying our justlegitimate demand.

The brief details of such provisions and write-offsof bad loans in the last years are furnishedhereunder:

Officers' Cause, July - 2014 5WORK IS WORSHIP , DO YOUR DUTY

b. Ob. Ob. Ob. Ob. OTHER FTHER FTHER FTHER FTHER FAAAAACTORS JUSTIFYING OUR DEMANDCTORS JUSTIFYING OUR DEMANDCTORS JUSTIFYING OUR DEMANDCTORS JUSTIFYING OUR DEMANDCTORS JUSTIFYING OUR DEMAND

FOR INCREASED WAGES:FOR INCREASED WAGES:FOR INCREASED WAGES:FOR INCREASED WAGES:FOR INCREASED WAGES:

The spiraling rate of inflation has made thelife of bank employees miserable and also erodedthe value of their earnings;

The wages should go well with the presentstandard of living, which has undergone aremarkable change with increase in basicrequirements;

Due to the increase in attrition rate, morenumber of employees needs to be recruited andreasonable wages need to be offered to retain theminasmuch as, the other comparable sectors offermore to their employees. This would not onlyencourage and motivate the employees but alsowould ensure perfect growth of the institution.

c. Wc. Wc. Wc. Wc. WAAAAAGES IN OTHER COMPGES IN OTHER COMPGES IN OTHER COMPGES IN OTHER COMPGES IN OTHER COMPARARARARARABLE SECTORS:ABLE SECTORS:ABLE SECTORS:ABLE SECTORS:ABLE SECTORS:

The wages of employees settled recently in othercomparable public sector organisations andGovernment are indicated hereunder:

( ( ( ( (`̀̀̀̀ in Crores) in Crores) in Crores) in Crores) in Crores)

YYYYYearearearearear Gross OperatingGross OperatingGross OperatingGross OperatingGross Operating Provisions made Provisions made Provisions made Provisions made Provisions made Bad Loans Bad Loans Bad Loans Bad Loans Bad Loans Net ProfitNet ProfitNet ProfitNet ProfitNet Profit

Profits ( Profits ( Profits ( Profits ( Profits (`̀̀̀̀))))) for Bad Loans (for Bad Loans (for Bad Loans (for Bad Loans (for Bad Loans (`̀̀̀̀))))) W W W W Written-off (ritten-off (ritten-off (ritten-off (ritten-off (`̀̀̀̀))))) ( ( ( ( (`̀̀̀̀)))))

2008-09 66,972 11,121 6,966 34,392

2009-10 76,861 18,036 11,185 39,257

2010-11 99,981 29,830 17,794 44,901

2011-12 1,16,335 38,177 15,551 49,514

2012-13 1,21,943 43,102 27,013 50,583

01 Coal India Ltd. 25% increase in Gross Wages

02 Steel Authority of India Ltd. 16% increase in basic and D.A(SAIL) Plus 6% increase in Perks

03 Indication by the previousGovernment to 7th Pay Commission 30 – 35% salary hike

04 Interim Relief The interim relief provided by various StateGovernments and other public bodies rangesbetween 25% and 30%

It may not be out of place to mention here theobservations of the Tribunal headed by ShriPanchapagesa Sastry, popularly known as ‘SastryAward’ that the Bank employees and officers dealwith huge amount of public money, hence it is allthe more necessary to compensate them withadequate salary and allowances so that they arecontended and do not succumb to the temptationsthat often come in their way, oftener than in mostother industries. Historically, bank employees andofficers were paid higher salary than theGovernment employees and officers of comparablelevels due to various factors like accountability,transferability, responsibility and role-sensitivity.However, subsequent Pay Commissions have given

a go by to the concept of pay parity and the salaryof bank employees and officers has come downsubstantially when compared to their peers in thecountry particularly after implementation of SixthPay Commission and consequent salary revisionsin other public sector undertakings. Presently, thebank employees and officers are far below theirpeers in respect of Salary and Allowances.

The percentage increase in the last wage revision,i.e., 9th Bipartite Settlement, for bank employees/officers was capped at 17.5% on total cost, thoughthe revision in other public sector undertakings wasin the range of 23-25%, because of additional coston account of one more option to pension. The

LET CUSTOMER SERVICE BE OUR MOTTO

5 Officers' Cause, July - 2014

spiraling cost of living and the high rate of inflationin the last years made the life of common manmiserable. As against the reasonable demand of25% increase in the pay slip components, the IBAhas offered a very meager 11% increase in payslip components. Banks also have affordabilityfor a respectable wage revision due to theincreasing trend in the profitability of all banks andalso considering the fact that the cost of wage billwould slide down due to reduction of staff strengthon account of huge retirements. The scheduledretirements of around 15% of employees duringthe 5-year settlement period would automaticallyreduce the wage bill expenses even if replaced byrecruitment.

PPPPPerererererquisite Tquisite Tquisite Tquisite Tquisite Tax:ax:ax:ax:ax:

We also bring to your kind notice another issueconfronting the bank employees and officers i.e.,Tax on Perquisites. The concessionary rate ofinterest loans, which are available to bankemployees and officers, such as Housing Loans,Car Loans, Two Wheeler Loans, etc., and thefacilities provided viz., housing accommodation,furniture & fixtures, reimbursement of expensesincurred on conveyance and maintenance, etc.come under the purview of Perquisite Tax and theemployees in the Bank are taxed accordingly,whereas the employees and officers in GovernmentDepartments do not come under the purview of

Perquisite Tax and this anomaly needs to beredressed.

With due consideration of merits on our submissionas above, we humbly seek your kind intervention inthe matter so that IBA can be suitably advised toensure respectable revision of wages to all bankemployees and officers by also considering the riskand responsibilities and also stress involved in theirfunctioning in the highly competitive environment,which is prevalent now.

We profusely thank you for providing us thisopportunity to interact with your goodself andenabling us to submit our view points. We trust thatour just demands will merit due consideration andwe hope that the bank employees and officers wouldachieve respectable wage revision with your kindintervention. The other issues confronting the bankemployees and officers include the recent retrograderecommendations of P J Nayak Committeechampioning the cause of private players, wiping outthe public sector character of the nationalized banksin the Country, the financial reform measures thatare detrimental to the interests of the general publicand the Nation on the whole. We shall be highlyobliged if we are permitted to present our views onthese issues separately with due consideration beforecontemplating any change.

Thanking you in anticipation,Thanking you in anticipation,Thanking you in anticipation,Thanking you in anticipation,Thanking you in anticipation,

Text of the letter by AIBOC addressed to the Union Finance Minister,to remove anomaly in treating the valuation of perquisite for the purpose of

Income Tax for Government Servants and employee of PSBs

RE: Budget Proposals 2014-2015Valuation of Perquisites on LeasedAccommodation / Tax Exemption onLeave Encashment on superannuation

earty congratulations on behalf of the entirebanking fraternity on your assuming charges

as Hon’ble Finance Minister of India. We areconfident that India is poised to take unfalteringgiant strides forward with a person of your caliberat the helm of affairs. We look up to you to giveour Economy the fillip that will make us a force toreckon with. As a banker community, we feelspontaneously at ease in approaching you withissues that are anomalous and need to beaddressed in the ensuing Budget Exercise.

Sec. 17(2) of Income Tax Act, 1961 defines

Perquisites and Rule 3 provides for the mechanismof taxation. According to the rules in force, thevaluation of perquisite is different for the Governmentservants and employees of Public Sector Banks.

One such issue that is engaging our mind is “theValuation of Perquisites” for the purpose of incometax on leased accommodation provided to the assesseby his employer. As employees of Public SectorBanks, we seek parity with the Government servantsparticularly with regard to the Valuation of Perquisitesof accommodation provided by the Employer orwhere the accommodation is taken on lease/rent bythe employer. Another issue where we seek parity ison Taxability of Leave Salary under Sec. 10(10AA)of Income Tax Act, 1961. It may be mentioned herethat for Government servants, the leave encashmentat the time of retirement is fully exempted from Income

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Officers' Cause, July - 2014 7

Tax. For non government servants, it is taxablebeyond Rs.3.00 lacs subject to the conditionsstipulated in Sec. 10(10AA).

Yet another issue is of Motor cars provided to thebranch for business development and other officialpurposes to the executives at branches andadministrative offices. Wherever personal use ofsuch official car is involved, the specified sum isrecovered from the salary of the branch head /executive. But the perquisite value is computed forthe provision of car as if it was provided for personaluse and not for business development / official

purposes. In as much as the perquisite towardscar cannot be directly attributed to the employee,it should fall under the category of Fringe BenefitTax and not to be taxed as perquisite.

Having regard for you as a practical and pragmaticperson with a balanced overview of issues, we seekyour intervention in removing the discriminatoryprovisions of Income Tax Act by treating theemployees of Public Sector Banks at par with theGovernment employees. Such a kind act on yourpart will uphold the principles of equity and removeour heartburns.

DISCIPLINARY PROCEEDINGSISSUE OF GUIDELINES REGARDING EFFECT OF PUNISHMENT

INTERPRETATION OF PUNISHMENTS ETC

ne of the issues that was being highlighted inour interaction with the Corporate Center during

the follow-up and bipartite meetings was thedifficulties encountered by our Officers’ who wereunfortunately caught in the net of the DisciplinaryProceedings, in the matter of interpretation of the orderof the Disciplinary Authority, the effect andinterpretation of Punishment etc. Federation had inthe recent past brought to the notice of theManagement the positive developments that havetaken place in other Public Sector banks and theinitiative of the IBA in the matter of simplifying theentire disciplinary procedure and working outsolutions which would provide greater clarity in thematter of rigor period, the interpretation of the effectof the Punishment, the time limit for the conclusionof the enquiry proceedings etc. Number of banks hasalso entered into discussions with their respectiveofficers’ associations in ensuring that the officers’ whoare unfortunately caught with the disciplinary net are

not unnecessary harassed for a longer period.

2. Federation had requested the Corporate Center toconvey their concern on some of these issues to theCircle Authorities so as to ensure that the Order ofthe Disciplinary Authority should clearly indicate theeffect of punishment, the rigor period, restoration etc.Further the Disciplinary Authority should alsoindicate the impact on the salary drawn by the officerconcerned and the restoration of the original positionthrough clear indications so that no scope is availablefor anyone to interpret the order in an ambiguousand disadvantageous manner.

3. We are happy to inform all our affiliates/membersthat in response the repeated requests the CorporateCenter has sent a communication to the Circleauthorities conveying them the concern of theFederation and advising them to take necessary stepsin this regard.

ur members are aware that the New Governmenthas taken several initiatives in regard to the

preparation of its maiden budget for the presentationin the Parliament. It has also taken the views of theseveral interested groups in regard to the preparationof the Budget. The Officers fraternity having its owntrade union representative forum in the form of All IndiaState Bank Officers’ Federation has been conveying itsviews at periodical intervals to the Government on theissues related to the Budget.

BUDGET PREPARATION – CONSULTATION PROCESSOUR COMMUNICATION TO THE MINISTRY OF FINANCE

Federation on 27/06/2014 sent a comprehensivecommunication to Shri.Arun Jaitely, the Hon’bleMinister of finance, concerning the banking industry,regulatory control, labour reforms, income tax ceilingon exemption, Housing, Fringe Benefits/perquisites,recovery of NPAs, consultation process etc., who hasbeen holding consultations with various groups of peoplein the matter of Budget, conveying our views/hopes/aspirations from the present budget.

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OUR LIFE IS WHAT OUR THOUGHTS MAKE IT 7 Officers' Cause, July - 2014

he General Secretary, AISBOF during his visitat Hyderabad, also visited the office of the

ABOA head quarters. A meeting was organizedwith the available local office bearers and members.

2. Com.M.Harshavardhan, General Secretary,ABOA, welcomed the guests. He gave a briefaccount of the activities of the SBH, the ABOAand requested the General Secretary, AISBOF tobrief about the latest developments at Industry level

VISIT TO ABOA HEAD QUARTERSBY PRESIDENT AND GENERAL SECRETARY, AISBOF

and also at the Bank level.

3. The visit of the General Secretary to the ABOA(Hyderabad) office provided yet another opportunityfor the ABOA and the Federation to come closerand in understanding each other and to furtherconsolidate our movement under the banner of theFederation. The leadership of both the CircleAssociation and the ABOA (Hyderabad) unit wereextremely happy on account of the visit of theFederation office bearers.

embers are aware that the Federation filed awrit petition in the Chennai High Court

challenging the communication issued by the IBAand the SBI withdrawing the facility of visitingforeign countries enroute LFC/HTC by ourOfficers. The Hon’ble High Court of Madras waspleased to issue a stay on the operation of thiscommunication issued by the Bank and allowed theOfficers to avail the facility of visiting foreigncountries enroute their LFC/HTC.

LEAVE FARE CONCESSIONFOREIGN TRAVEL ENROUTE TO LFC

MADRAS HIGH COURT EXTENDS STAY BY SIX WEEKS

2. The writ petition came up for hearing on the 12thof June, 2014. At the request of the counsel for therespondents i.e., State Bank of India and the IBA,who sought time for filing a counter, the case hasbeen posted after six weeks and the interim stayhas been extended till then and consequently thefacility of foreign travel continues pending finalorders of the Hight Court.

‘SBIOA BHAVAN’ GUEST HOUSE AT HYDERABAD INAUGURATEDYET ANOTHER FEATHER IN THE CAP OF THE SBIOA (HC)WELL FURNISHED VIP GUEST HOUSE NOW AVAILABLE

FOR OUR MEMBERS

et another glorious achievement by the SBIOA,Hyderabad Circle. The grand new building of the

‘SBIOA BHAVAN’, guest house, for the benefit of allthe members, with amenities including a wonderfulconference hall and pantry facilities was inauguratedon 2nd June, 2014. Our members are aware that theHyderabad Circle Association had a Guest House inNarayanaguda, Hyderabad, acquired 20 years back,catering to all our members from across the country.As the facilities were inadequate and the building quiteold, it was decided to demolish the same and built awell equipped guest house with all facilities. Theconstruction was supervised and completed in a recordtime in an excellent manner ensuring high quality, fullyfurnished and air conditioned accommodation.

2. The programme commenced with SatyanarayanaPooja. The Guest House was formally inaugurated bySri.C.R.Sasikumar, Chief General Manager, LHO,Hyderabad Circle and Com.Y.Sudarshan, GeneralSecretary, AISBOF & President, AIBOC.

3. The Guest House was dedicated to the service ofthe members in the well organized function.Com.G.Subramayam, General Secretary, HyderabadCircle welcomed the guests, invitees and members. Hetraced the entire sequence of events and the hard workput in by the office bearers of the Hyderabad CircleAssociation in making this dream come true.Shri.C.R.Sasikumar, the Chief General Manager,Hyderabad LHO, participating in the inaugural functionappreciated the activities of the Circle Association and

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the high quality of the Guest House that is now beingprovided to the members.

4. In continuation of the noble a tradition of SBIOA,Hyderabad Circle, a social service activity wasconducted on the occasion by donating Rs.5000/- to ‘Aashayam’Aashayam’Aashayam’Aashayam’Aashayam’ a mentally retarded service organization.

5. The details of the facilities available and the tariffof the rooms and suites at SBIOA Bhavan at Hyderabadis as follows:

18 DOUBLE ROOMS WITH DOUBLE OCCUPANCY AT RS.500/- PER DAY PER ROOM

6. All our members should take full advantage of thefacility available in Hyderabad and may contact theGeneral Secretary of the Circle Association at thefollowing address for their requirements:-

State Bank of India Officers’ Association,Hyderabad Circle,C/o State Bank of India,

LHO, Bank Street, Koti,HYDERABAD-500 001 (A.P). Fax: 04024756874

n yet another epoch making effort, the Managementof the Bank is embarking upon a massive programme

meant to meet the grass root level members of theinstitution all over the country, in order to revitalize thespirit of commitment and dedication and to take thebank to further greater heights in the days to come.

Members are aware that at periodical intervals, the Bankhad been conducting programmes with the idea ofenlightening the corporate objectives and also thechallenges that exist, in the backdrop of the tremendousgrowth of the banking opportunities and the competitionfrom our peers in the industry. We have earlier had aprogramme in the name of ‘Parivartan’ and thereafter‘Udaan’, etc., which have created its own impact at theoperating level and brought the corporate concernsnearer to each and every employee in the bank. But therehas been a perceptible lull in such team building/motivational programmes during the last two years. Afterthe assumption of Smt.Arundathi Bhattacharya, the newChairman, she has taken personal interest on the HumanResources Development with a number of ideas andinitiatives to involve each and every member of the staffin building a strong and vibrant State Bank of India whichis poised to be a global player in the days’ to come. Theprogramme is titled as ‘AAROHAN’.

The Management invited the Core Committee of boththe Federations on 14th June, 2014 to explain the purposeand objective of this programme so that the leadershipof the Federation is aware of the initiative taken by theManagement. The following members attended theprogramme:

Com.B.K.Awasthi, President, AISBOF Com.Y.Sudarshan,

‘AAROHAN’, A PRESENTATION ON MASS COMMUNICATIONBUILDING A STRONG TEAM CULTURE TO FACE CHALLENGES AHEAD

MANAGEMENTS WANT TO COVER THE ENTIRE WORKFORCE

General Secretary, AISBOF, Com.S.K. Mukherjee,Com.M.Sreenath, Com.K.B.Bhowmick, Senior VicePresidents and Com.Ram Kumar Sabhapathy, Joint GeneralSecretary, Com.K.Nagaraja Shastry, Secretary, AISBOF.

The State Bank of India is in the midst of a highlycompetitive financial world. We have our own inherentstrengths in the form of highly motivated staff and officerswho are well equipped in dealing with the day to dayproblems and operations. The technology, thediversification of our product mix and the human resourceshave been our strong weapons and needs to be made useof, so that the State Bank of India will continue to remainnumber one with increased business share in the market.The Federation stands committed to achieve this objectiveand ensure that the programme is successful.

The programme will take off on 25th June, 2014.The programme will take off on 25th June, 2014.The programme will take off on 25th June, 2014.The programme will take off on 25th June, 2014.The programme will take off on 25th June, 2014.

Federation had conveyed their desire that the programshould be conducted for the entire leadership of theFederation covering both the Presidents and GeneralSecretaries and EC members of the affiliates of theFederation so that the leadership at all level is fullyconversant with the details of the program along with thepurpose and objective. The management has agreed andlikely to hold the same shortly. We are also happy to notethat the current programme has been designed and wouldbe handled entirely by the in-house team. This will enablethe officers and staff to fully share their experience andinvolve in the implementation with heart and soul. Let usextend all co-operation in ensuring that the State Bank ofIndia will reach further heights while maintaining itspremier position in the banking industry.

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CONDUCT OF RECRUITMENT EXAMINATIONS ON SATURDAYS

e have today sent a communication to DMD& CDO, SBI, Corporate Centre, in respect of

the subject matter, requesting them to conductthe examination for recruitments to various posts

ll the well-educated are equally literate infinance may remain just that-an assumption,

according to Smt. Arundhati Bhattacharya,Chairman, State Bank of India (SBI). She has foundthat at least some of the IIT grads have a tough timedistinguishing between basic concepts of debt andequity.

Same goes with their awareness about insuranceproducts. Nor would they know if they need to providefor risk while building their asset portfolio she said,while addressing a corporate social responsibility eventat associate State Bank of Travancore (SBT) atThiruvananthapuram on Thursday the 5th June 2014.

SBT donated 30 computers, two projectors and twolaptops for setting up two smart classrooms at theKarthika Thirunal Government vocational and Higher

Secondary School for girls at Thiruvanthapuram, onthe occasion. The chairman also called for the need todistribute financial literacy material in schools. Thepower of compounding should be taught to them, shesaid.

The saving habit needs to be inclulcated in them evenwhile helping them with the conduct of personalfinance, she added, and lauded the initiative of the2013 batch of clerical staff at SBT that formed a sociallyresponsible group ‘SBT Thanal 2014’

Batch members proceeded to raise a fund by donatinga sum equal to their first increment for treatment ofpoor cancer patients at the Regional Cancer Centre atThiruvanthapuram. With these youngsters around, thefuture of the bank is bright, the chairman said.

Source: Business Line, Date: 6.6.2014.

SBI BUSINESS PER EMPLOYEE SURGES ON LARGE –SCALE HIRING

he State Bank of India’s business per employeehas seen a 51 percent jump in the last four years

on the back of large-scale recruitment.

Staff productivity or business per employee increasedto Rs.10.64 crore as at March –end 2014 againstRs.7.04 crore as at March –end 2011.

Though profit per employee increased to Rs.6.45 lakhin 2012-13 from Rs.3.85 lakh in 2010-11, it declinedto Rs.4.85 lakh in 2013-14 primarily due to higherprovisioning, increase in overheads and staff costduring the year, the bank said in its annual report.

The large –scale recruitment of Generation Nextemployees in the Officers and Assistants grade overthe last three to four years has brought about a far –reaching attitudinal change among staff in theircustomer interface and services across the branches,the bank said.

BUSINESS GROWTHBUSINESS GROWTHBUSINESS GROWTHBUSINESS GROWTHBUSINESS GROWTH

Further, recruitment has also become a catalyst inenhancing /improving the productivity and efficiency ofemployees, resulting in an increase in business growth.Many of the new Assistants hold good academicqualifications, including computer engineering and MBA.

In FY2014, SBI saw its employee additions andretirement /attrition aggregating 8,021 (22,393 inFY2013), and 14,284 (9,578), respectively. The bankhas been recruiting in a big way since 2009 as eachyear thousands of employees, who were recruited inthe mid -1970s, are retiring. As on March –end 2014,SBI had 2, 22,033 employees (2, 28,296 as on March–end 2013) on its rolls. Of this, 36 percent are officers;46 percent are clerical staff; and the remaining sub-staff. Women accounted for about 20 percent of thetotal employee strength.

Source: Business Line, Date:25/06/2014Source: Business Line, Date:25/06/2014Source: Business Line, Date:25/06/2014Source: Business Line, Date:25/06/2014Source: Business Line, Date:25/06/2014

in the bank and associate banks, on Sundays so thatthe functioning of the branches is not affected andalso requesting to enhance the compensation to theofficers who are supervising the exams.

ACADEMIC GRADES MAY NOT ALWAYS REFLECTFINANCIAL LITERACY, SAYS SBI CHIEF

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BankingBankingBankingBankingBanking

NEVER BEND BEFORE THE INSOLENT MIGHT

Officers' Cause, July - 2014 10

STATE BANK TO RAMP UP POS TERMINAL NETWORK

tate Bank of India, will leapfrog rivals by ramping upits point of –sale (POS) terminal network by

1.20 lakh each year over the next two years, said a topofficial. Banks install POS terminals at merchant outlets tofacilities acceptance of payments from customers byswiping their debit /credit /pre-paid cards on the terminals.Overall, banks collectively had a network of 10.76 lakh POSterminals. According to Suhshil Kumar Mishra, DeputyManaging Director, SBI by adding 1.20 lakh POS terminalsevery year, the bank will be catapulted to the numero unoposition among all banks. Already, SBI has the largest

network of ATMs (44,062 of April –end) in the country.With the ATM network of SBI’s five Associate Bank puttogether, the State Bank Group has 51,753 ATMs. ThoughSBI is the largest player among public sector banks whenit comes to ATMs, it wants to go a step ahead and becomethe largest in POS terminals. By expanding the POSterminal network, the bank is eyeing more fee-basedincome. As of April –end 2014, SBI had a debit card baseof 12.39 crore. The State Bank Group (including the fiveAssociate Banks of SBI) had a debit card base of 15.68crore. Source: Business Line, Date:18/06/2014

n their monetary policy announced on 3rd June 2014the Reserve Bank of India (RBI) cut the

statutory liquidity ratio (SLR) by 50 basis points to22.5% from 23% while keeping key policy ratesunchanged. But what is SLR and cash reserve ratio(CRR), and how are they different?

STSTSTSTSTAAAAATUTORTUTORTUTORTUTORTUTORY LIQUIDITY RAY LIQUIDITY RAY LIQUIDITY RAY LIQUIDITY RAY LIQUIDITY RATIO (S L R)TIO (S L R)TIO (S L R)TIO (S L R)TIO (S L R)

Banks are required to invest a certain percentage oftheir time and demand deposits in assets specified byRBI, including gold, and government bonds andsecurities. In monetary jargon, SLR is that percentageof net demand and time liabilities (NDTL); in otherwords, bank deposits, that must be used to buy specifiedassets. The SLR ratio has been in a range of 23-25%for the past 10 years. The current SLR ratio of 22.5%,which means that for every ̀̀̀̀̀ 100 deposited in a bank,it has to invest `̀̀̀̀22.50 in any of the asset classesapproved by RBI. Banks usually keep more than therequired SLR, and at present, the actual SLR stands at29%o. RBI wants banks to hold a part of the money innear cash so that they can meet any unexpected demandfrom depositors at short notice by selling the bonds.

In India, historically, banks’ SLR has been high as theyneed to bear the burden of the government’s fiscaldeficit. The government borrows from the banks everyyear to bridge the fiscal deficit. A cut in SLR indicatesthat RBI is confident of the government’s commitmentto fiscal consolidation.

CCCCCAAAAASH RESERVE RASH RESERVE RASH RESERVE RASH RESERVE RASH RESERVE RATIO ( C R R )TIO ( C R R )TIO ( C R R )TIO ( C R R )TIO ( C R R )

CRR is a portion of the banks’ NDTL or deposits thatneed to be kept in their specified current accountsmaintained with RBI. This money earns no interest.The current CRR level is 4%o. This means that forevery ̀̀̀̀̀ 100 of deposit that a bank holds, it keeps aside`̀̀̀̀4 with RBI. CRR, which is maintained on a fortnightlybasis, is a tool that the central bank uses to managemoney supply and liquidity in the market. Generally, itis increased to reduce the outstanding liquidity in thesystem. RBI reduces CRR if it needs to increase themoney supply in the economy.

SIMILSIMILSIMILSIMILSIMILARITIESARITIESARITIESARITIESARITIES

Both SLR and CRR are considered as reserves. A higherreserve requirement through, say, CRR and .SLR,makes banks’ deposits relatively safe but at the sametime increases the effective cost of their funds. Thisis because a certain portion of their deposits are alwaysredeemable. Lowering of reserve requirementincreases the resources available with a bank to lend.

DIFFERENCESDIFFERENCESDIFFERENCESDIFFERENCESDIFFERENCES

The important difference between CRR and SLR isthat CRR has to be maintained in cash while SLR canbe maintained either in Cash or in assets that RBIsuggests. Banks don’t earn any returns from the moneyparked in the form of CRR. However, banks can earnreturns from SLR. Source: Mint. Date: 5.6.2014 Source: Mint. Date: 5.6.2014 Source: Mint. Date: 5.6.2014 Source: Mint. Date: 5.6.2014 Source: Mint. Date: 5.6.2014

DID YOU KNOW?Difference between cash reserve ratio and statutory liquidity ratio.

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here was a wave across the country during the recentlyheld 16th Lok Sabha election. Avalanche of

attacks and counter attacks were part of the campaignbetween the leaders of political parties who indulged in

hate speech of different tastes.

In a democratic, socialistic, secular and sovereign countrylike India, Constitution provides opportunity and right

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TIME AND TIDE WAIT FOR NONE

11 Officers' Cause, July - 2014

to every citizen to participate in its democratic processand to stand as a candidate in the election under theRepresentation of people Act. As such it is up to the peopleof the country to decide and to elect their leader to rulethe country not by any groups of people or intellectuals.Contrary to this certain intellectuals, artists, economists,writers were seems pessimistic or apprehensive aboutthe capacity of certain leaders. Their egoistic attitudemakes them to prejudge the quality and capacity of theleaders they do not like, instead of waiting for aperformance report. In this process, they even tried tocreate a prejudice among the general public much to theembarrassment and displeasure of the right thinkingpeople. Public expressions of criticism, sentiments, hecticparlays, playing out multiple of issues are nothing butpart of political game not the work of intellectuals.

Country had great expectations from these intellectualsif they had come out with constructive ideas and advises,instead it looked like that they have fallen prey to certainpolitical parties. Instead of attacking the system theyhave chosen to attack individuals, unbecoming of theirstature and expectations. Attacking in the name of theircaste, past profession, political affiliation, familybackground etc., are all viewed with a bad taste. All thesechallenges ultimately became suicidal that made themimmature, when they had to swallow their own wordsbefore the public. Intellectuals are only born, not created.The inherent quality in them makes them a respectablefigure in the society. The More knowledge they acquire,more the humble they should become. The renownedHindi poet Premchand compared humility in an individual

nquirnquirnquirnquirnquiry—Once it is held that charges againsty—Once it is held that charges againsty—Once it is held that charges againsty—Once it is held that charges againsty—Once it is held that charges against1st despondent have not been proved and the1st despondent have not been proved and the1st despondent have not been proved and the1st despondent have not been proved and the1st despondent have not been proved and the

removal order is set asideremoval order is set asideremoval order is set asideremoval order is set asideremoval order is set aside He would be automaticallyentitled for continuity of service and all other attendantbenefits and back wages- But respondent is draggedto this Court on several occasions and ultimately he

was retired during pendency of proceedings before theLabour Court—There are no grounds of review of earlierorders. Review petition is dismissed- Petitioners aredirected to pay the entire retirement benefits ofrespondent.

[Paras 2 and 4]

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to a fruit bearing tree. More the fruit, more will be thetendency of the tree to bend its branches. Freedom ofspeech enshrined in the constitution does not conferabsolute right to anyone to speak without responsibility,especially if defamatory or against decency. Defamatoryspeech includes slander that makes a person a character ofridicule. Constitutional right also cannot be used as aplaying thing by some fickle minded people. We shouldrespect positive things from any person even from our ownenemy instead of ridiculing him. One can enlarge hisprinciple but that principle cannot enlarge him. Such peopleare only living on the myth of cognitive psychology and onillusionary ego.

When people consider a person as intellectual it only makeshim egoistic fuelled by impatience, that makes him facerejections by the admirers, leading to intolerance and tears.According to Albert Einstein ‘We should take care not tomake the intellect our God. It has ofcourse powerfulmuscles but not personality. It cannot lead, it can onlyserve’. Politician often play communal card to win minoritycommunity with their pseudo secularistic policies. Theyplay with words of community and communalism with punand fun for their selfish ends. In politics it is easy to dividebut much harder to unite people. India is culturally andtraditionally a rich nation. But this very richness has beena cause of concern for the current generation. Most of theIndians have been brought up with a value system. But weperceive it as traditional shackle and do not want to bechained down with this. At the same time we want othersto live a life the way we want, a difficult proposition inlife.

[2014 (140) FLR 993](ANDHRA PRADESH HIGH COURT)

B. CHANDRA KUMAR, J.W.P. No. 23978 of 2002

AndReview W.P. M.P. No. 6746 of 2006

July 5, 2013Between

A.P.S.R. TRANSPORT CORPORATION and othersAnd

MOHD.FASIUDDIN and others

Judicial VJudicial VJudicial VJudicial VJudicial Verdicterdicterdicterdicterdict

Subscribe to OFFICERS' CAUSE DOMESTIC ENQUIRY LABOUR RESEARCH SUBSCRIPTION SUBSCRIPTION SUBSCRIPTION

Annual : Annual : Annual : Annual : Annual : `̀̀̀̀.40/- Annual : .40/- Annual : .40/- Annual : .40/- Annual : .40/- Annual : `̀̀̀̀.40/- Annual : .40/- Annual : .40/- Annual : .40/- Annual : .40/- Annual : `̀̀̀̀.30/-.30/-.30/-.30/-.30/-

Drafts should be drawn in favour ofAll India State Bank Officers' Federation

and mailed toand mailed toand mailed toand mailed toand mailed toThe General Secretary

ALL INDIA STATE BANK OFFICERS' FEDERATIONState Bank Buildings, St.Mark's Road, Bangalore-56001State Bank Buildings, St.Mark's Road, Bangalore-56001State Bank Buildings, St.Mark's Road, Bangalore-56001State Bank Buildings, St.Mark's Road, Bangalore-56001State Bank Buildings, St.Mark's Road, Bangalore-56001

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Edited and Published by Sri. Y. Sudarshan on behalf of AISBOF, SBI Buildings, St.Mark's Road,Bangalore - 560 001. Printed by Sri C.A. Ramachandra Murthy at Anant Art Printery, Bangalore.

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Officers' Cause, July - 2014 12

LICENSED TO POST WITHOUT PREPAYMENT. LICENCE NUMBER. WPP/82

JUDGMENTJUDGMENTJUDGMENTJUDGMENTJUDGMENT

B. CHANDRA KB. CHANDRA KB. CHANDRA KB. CHANDRA KB. CHANDRA KUMAR, J.-UMAR, J.-UMAR, J.-UMAR, J.-UMAR, J.-The only contention of thelearned Counsel for the petitioners in this review petitionis that having forward cash and ticket irregularities, theA.P. State Road Transport Corporation suspended the1st respondent and once he is suspended, the employeeis entitled for subsistence allowance and that the orderof this Court shows that the 1st respondent is entitledfor regular salary, even during the period of suspension.

It is true that during the period of suspension an employeewill be paid subsistence allowance. If the charges levelledagainst the employee are subsequently proved in thedepartmental enquiry and the alleged misconduct isupheld by the Courts and punishment is imposed onsuch employee, the employee would be entitled for onlysubsistence allowance. But, whereas in the present case,it is found that the charges levelled against the employeeare ultimately not proved or if the Courts find that theemployee is not liable for any penalty or if it is held thatthe removal order itself is illegal, then initiation ofdisciplinary proceedings itself is deemed to be irregularand in such circumstances, the employee would beentitled for full salary deeming that he even suspendedfrom service and duly entitled for continuity of serviceand for all attendant benefits.

2. In this case, admittedly the enquiry officer categoricallyfound that the charges levelled against the 1st respondenthave not been proved. Once it is held that the chargeslevelled against tile lst respondent have not been provedand the removal order is set aside, he would beautomatically entitled for continuity of service and allother attendant benefits and back wages. It is mostunfortunate that the 1st respondent has been draggedto this Court on several occasions and ultimately, heretired during the pendency of the proceedings beforethe Labour Court.

3. Having regard to the ambit of the review and havingregard to the grounds raised in the review petition andin view of the above discussion, it is clear that there areno grounds to review the earlier order passed by thisCourt dated 20.12.2004.

4. Accordingly, the review petition is dismissed. In thecircumstances, the petitioners are directed to pay theentire retiremental benefits to the 1st respondent, withinsix (6) weeks from today, as per the award of the LabourCourt.

5. Consequently, W.P. M.P. No. 6747 of 2006, pendingin Rev. W.P. M.P. No. 6746 of 2006, shall stand closed.

RRRRReview Peview Peview Peview Peview Petition Dismissed.etition Dismissed.etition Dismissed.etition Dismissed.etition Dismissed.